Paul Samuelson, whose Nobel Prize was awarded in 1970, is not in vain considered an economist of all time. A significant part among his achievements constitute proof of the fundamental theories and principles of virtually all sections of the economy: the theory of production, international trade, financial analysis, capital theory and economic growth, the history of economic thought, macroeconomics. We invite you to get to know such an outstanding scientist as Paul Samuelson. The ideas briefly characterizing his main achievements will be presented in this article. Scientists still read and reread his works to this day.
Samuelson's first article
The economic theory of Paul Samuelson is set forth in his books and articles. The scientist wrote the first article at the age of only 23 years, in 1938. It is called Notes on a Clean Theory of Consumer Behavior. At the time of writing, Samuelson was a graduate student. He showed that the demand curve, a well-known analysis tool, can be inferred from those preferences that were “revealed” due to the part of purchases that can be observed on the market, without resorting to indifference curves or marginal utility theory .
Main articles
In 1939, Samuelson's article, “The Interaction of the Multiplier and the Accelerator,” showed that if you add the (Keynesian) model of the investment accelerator to the theory of determining income, you get a simple but complete explanation of why the economy is going through business cycles nowadays. In 1948, an article appeared, “International Trade ...”, which provided evidence that the arguments of free trade supporters cease to apply under certain conditions. Economists in the same way discovered many years ago that the production of certain goods through the use of a market mechanism is inefficient, since the benefits they bring are available to everyone, so no one is interested in paying for them. Nonetheless, only Samuelson, in an article entitled "A Pure Theory of Public Expenditures," provided a rigorous scientific definition of the characteristics and properties of these public goods.
Dissertation
Samuelson defended his brilliant doctoral dissertation at Harvard University in 1941. However, the work was published only in 1947. It is called the Foundations of Economic Analysis. This is another step forward in the understanding by the economy that any economic behavior can be fruitfully studied. To do this, it is necessary to approach its consideration as a maximization problem, which is solved by the integral and differential calculus. Samuelson formulated the so-called principle of compliance. According to him, the analysis of statistical equilibrium cannot give positive results if there is no evidence of a level of stability corresponding to it. The latter means that insignificant deviations from the equilibrium values of various variables are self-correcting. This formulation laid the foundation for the current interest of scientists in economic dynamics, as well as in the study of prices that are observed in nonequilibrium conditions.
Essential Books of Samuelson
All of the above is very impressive, but this is not all the achievements of the American scientist. In 1948, the textbook "Economics" was created (Paul Samuelson, William Nordhouse), intended for the introductory level. It featured Samuelson’s invention, the 45-degree Keynesian Cross, which defines national income. This invention played a key role in spreading such a direction as Keynesianism in the years after World War II. In 1958, Samuelson created a book called Linear Programming and Economic Activity. It was co-written by Robert Solow and Robert Dorfman. This book played a very large role in spreading the methods of mathematical optimization that appeared during the war. The development of mathematical optimization took place in conjunction with Keynesian economics. This book was not just a textbook, because the authors managed to combine the theory of economic growth, linear programming and price theory, that is, the issues that were considered before them in isolation.
Paul Samuelson: biography
The future scientist was born in Indiana (the city of Gary) in 1915. At the age of sixteen he entered the University of Chicago. Samuelson received his master's degree from Harvard University when he was not yet twenty. And at 26 he was already a doctor of philosophy. Samuelson's dissertation received the David A. Wells Award from Harvard University. Then he began to work as a teacher at the Massachusetts Institute of Technology. After 6 years, Samuelson became already a full professor. At this institute, he worked all his life, until his retirement, held in 1986.
After Samuelson received the Nobel Prize, his numerous publications continued to appear in print. They covered a wide variety of topics, including the optimal social security system and the theory of labor exploitation set forth in the works of Marxists. From the mid-1970s and later, Samuelson's articles on “equalizing factor prices” on international trade have clearly shown that freedom of trade between different states should help reduce the differences between capital income and labor income in these countries.
As for his personal life, Samuelson has 4 sons and 2 daughters from his first wife. He married a second time in 1981. Despite his venerable age, the scientist after his marriage continued his teaching activities at Harvard, and also advised the Federal Reserve and the US government.
Samuelson died on December 13, 2009 after a short illness. Thus, he lived to be 94 years old. The press service of the Institute of Technology announced its demise to the public.
Prizes and awards
Paul Samuelson is the winner of many awards, as well as the owner of a number of honorary titles. In 1947, he was awarded the J. B. Clark Prize , which became the first in this series. This prize is awarded to young scientists (under 40) for achievements in the field of economics. In 1953, Samuelson became president of the Econometric Society, and then, in 1961, the American Economic Association. Between 1965 and 1968, Paul Samuelson also headed the International Economic Association. The scientist received the A. Einstein Medal in 1970. Then he became a Nobel laureate. Samuelson received it for his contribution to the development of the economy.
State activity
Samuelson was an adviser to various government agencies, including the Treasury, the Office of the Military Industry, the Federal Reserve, the Budget Bureau, etc. In addition, he was an adviser to US President Kennedy. Paul Anthony Samuelson wrote a special group report addressed to this president. For many years this scientist, like M. Friedman, was a regular contributor to the Newsweek periodical. In 5 thick volumes, his selected articles were collected. The work was called the "Collection of scientific works" and was published in 1966.
Samuelson's literary style
Note that the literary style of this scientist is characterized by caustic irony and contempt for mere mortals. At the same time, he also has a tendency to the exact expression of thoughts, characteristic of all born educators. Being one of the most prolific economists of all time (for 45 years this scientist created an average of one article each month), he became one of the most successful authors regarding the publication of his works. The textbook created by Samuelson, Paul Anthony ("Economics"), for example, has been published for more than two dozen editions. He was translated into at least 12 languages of the world. This work was sold in various countries in the amount of more than 4 million copies.
A truly unique, unprecedented event in the history of economics! Even in our country, it was published, of course, with unauthorized amendments and ideological notes.
Why has Economics become so popular?
For many years, economists have suffered from a lack of connection between the new macroeconomics (Keynesian) and the old microeconomics (neoclassical). However, Samuelson in the textbook he created claimed to be a "neoclassical synthesis." Employment problems, in accordance with it, require intervention in the neoclassical Keynesian theory. However, the reins of government can again be returned first after full employment is achieved.
This recognition is the key to understanding the quick success of the book that Paul Samuelson (Economics) created. One of its most interesting features (by the way, an excellent example of printing art, as well as the first textbook on economic theory, made using color graphics) is the measure in which successful publications managed to reflect the interest of the economic community, which has changed over time. A new urgent topic had not yet had time to fully emerge, as it was immediately reflected in the next edition of The Economy.
The secret of Samuelson's great influence
Paul Samuelson, known for his "liberal" views (in the American sense of the word), tried to keep a middle ground in the most important issues, such as bureaucracy or the market, public or private, monetarism or Keynesianism. He never took extreme ideological positions in his works. Thus, Paul Samuelson is an excellent example of a scientist and economist who held centrist views in politics. This is one of the reasons for the great personal influence of this economist.
Enemies and fans
Samuelson did not have many enemies. And those that were called him the economic Paganini and the intellectual balancer. But many fans of this scientist consider him the founder of the main direction of economic science in our time. They do not hesitate to call the "Samuelson era" the post-war period of development of this science.